North America Digital Gift Card Market 2024–2033

Reports Description

As per the current market research conducted by the CMI Team, the North America Digital Gift Card Market is expected to record a CAGR of 14.7% from 2023 to 2032. In 2023, the market size is projected to reach a valuation of USD 151.1 Million. By 2032, the valuation is anticipated to reach USD 518 Million.

The North America Digital Gift Card market refers to the industry centered around electronic vouchers or prepaid cards, redeemable for goods or services online. Shaped by consumer preferences for convenient and contactless transactions, the market is characterized by key players like Amazon, Walmart, and tech giants such as Apple and Google.

Past trends saw a surge in online shopping and e-commerce integration, while current dynamics emphasize personalization, digital wallet integration, and strategic collaborations. The market continues to evolve to meet tech-savvy consumer expectations, offering a diverse range of digital gift card options and driving innovation within the digital gifting sector.

North America Digital Gift Card Market – Significant Growth Factors

The North America Digital Gift Card Market presents significant growth opportunities due to several factors:

• E-commerce Boom: The thriving e-commerce landscape in North America serves as a major driver for the digital gift card market. As consumers increasingly opt for online shopping, digital gift cards offer a convenient and flexible way to make purchases, contributing to the overall growth of the market.

• Contactless Transactions Trend: The growing preference for contactless transactions, accelerated by the COVID-19 pandemic, has propelled the adoption of digital gift cards. As consumers seek secure and convenient payment options, digital gift cards align with the trend, providing a seamless and touch-free gifting experience.

• Mobile Wallet Integration: The integration of digital gift cards with popular mobile wallets enhances accessibility and convenience. As more consumers embrace mobile payment solutions, the integration fosters a smoother redemption process, driving the demand for digital gift cards across various platforms and applications.

• Personalization and Customer Engagement: The demand for personalized experiences has led to the customization of digital gift cards. Brands are increasingly offering options for personalized messages, designs, and recipient-specific choices, enhancing customer engagement and making digital gift cards more appealing to a diverse consumer base.

• Blockchain Technology Integration: Leveraging blockchain technology presents an opportunity for enhancing the security and transparency of digital gift card transactions. Implementing blockchain can mitigate fraud risks and instil greater trust among users, creating a more resilient and secure ecosystem for digital gift cards.

• Cross-Industry Collaborations: Opportunities lie in forging strategic collaborations between digital gift card providers and diverse industries. By partnering with retailers, service providers, or entertainment platforms, digital gift card companies can expand their reach, offer a wider range of options, and tap into new customer segments, fostering overall market growth.

North America Digital Gift Card Market – Mergers and Acquisitions

The North America Digital Gift Card Market has seen several mergers and acquisitions in recent years, with companies seeking to expand their market presence and leverage synergies to improve their product offerings and profitability. Some notable examples of mergers and acquisitions in the North America Digital Gift Card Market include:

• In 2023, Starbucks intensified its partnerships with tech giants Apple, Microsoft, and Amazon, aiming to double its 75 million Rewards members within five years. Leveraging these collaborations, Starbucks seeks to enhance its customer engagement and loyalty programs by tapping into the vast user bases and technological ecosystems of these industry leaders.

• In 2020, PayPal has officially introduced its digital gift card platform. This new initiative expands PayPal’s offerings, allowing users to conveniently purchase and send digital gift cards. The platform aims to enhance user experience and provide a seamless way for customers to engage in digital gifting.

These mergers and acquisitions have helped companies expand their product offerings, improve their market presence, and capitalize on growth opportunities in the North America Digital Gift Card Market. The trend is expected to continue as companies seek to gain a competitive edge in the market.

COMPARATIVE ANALYSIS OF THE RELATED MARKET

North America Digital Gift Card Market – Significant Threats

The North America Digital Gift Card Market faces several significant threats that could impact its growth and profitability in the future. Some of these threats include:

• Cybersecurity Risks: The North America Digital Gift Card market faces significant threats from cybersecurity risks, including data breaches and hacking attempts. As digital transactions increase, malicious actors may target vulnerabilities in systems, potentially compromising sensitive user information and eroding consumer trust.

• Fraudulent Activities: The market is susceptible to various forms of fraud, such as unauthorized use, counterfeit cards, or fraudulent redemptions. Fraudulent activities can lead to financial losses for both consumers and businesses, undermining the integrity of digital gift card systems.

• Regulatory Challenges: Evolving regulatory landscapes and compliance requirements pose a threat to the digital gift card market. Stricter regulations may impact operations and impose additional costs on businesses, potentially hindering the growth and flexibility of digital gift card offerings.

• Market Saturation and Competition: Intense competition among digital gift card providers and market saturation can pose a threat to individual companies. With numerous players vying for consumer attention, maintaining differentiation and market share becomes challenging, potentially leading to pricing pressures and reduced profit margins.

• Technological Obsolescence: Rapid technological advancements may render existing digital gift card platforms obsolete. Companies face the constant challenge of staying ahead in terms of technology to meet evolving consumer expectations, and failure to adapt to emerging trends can result in a loss of relevance in the market.

Report Scope

Category-Wise Insights

By Channel

• Brick and Mortar: Brick and Mortar channels involve physical retail locations. In the North America Digital Gift Card Market, traditional stores are adapting by offering digital gift cards alongside physical ones. Despite challenges, these channels leverage in-store visibility to promote digital gift cards, catering to customers who prefer in-person shopping experiences.

• Digital: Digital channels refer to online platforms, mobile apps, and e-commerce websites. In the North America Digital Gift Card Market, the digital segment is thriving, driven by the shift to online shopping. It offers convenience, instant delivery, and diverse customization options, reflecting evolving consumer preferences for digital transactions.

By Application Area

• Consumer Goods: Digital gift cards in consumer goods refer to electronic vouchers for retail products. Trends include personalized gifting options and brand collaborations, enhancing user experiences and driving market growth in North America.

• Health and Wellness: In the health and wellness sector, digital gift cards cater to fitness classes, spa services, and wellness products. Trends emphasize subscription-based services and virtual experiences, reflecting the industry’s dynamic shift towards holistic well-being.

• Restaurants and Bars: Digital gift cards in the food industry are electronic vouchers for restaurant meals and bar services. Trends include contactless payments, online ordering integration, and loyalty program tie-ins, aligning with consumer preferences for convenience and safety.

• Travel and Tourism: For travel and tourism, digital gift cards cover flights, hotels, and experiences. Trends focus on flexible redemption options, personalized travel packages, and partnerships with travel platforms, adapting to changing travel behaviours in North America.

• Media and Entertainment: Digital gift cards in media and entertainment encompass streaming services, gaming, and digital content. Trends involve exclusive content offerings, partnerships with streaming platforms, and innovative ways to engage users in the dynamic entertainment landscape.

• Others: The “Others” category includes diverse applications like online marketplaces, tech services, and more. Trends encompass blockchain integration, diverse partnership strategies, and innovative features to cater to various consumer preferences in the North America Digital Gift Card Market.

By Card Type

• Closed Loop: Closed-loop digital gift cards are restricted to a specific retailer or brand. In North America, this segment is characterized by personalized experiences, brand loyalty programs, and an emphasis on customer engagement. Trends include enhanced customization, integrated loyalty rewards, and seamless redemption experiences.

• Open Loop: Open-loop digital gift cards are versatile and can be used across multiple retailers. In the North America market, this segment sees trends such as widespread acceptance, integration with mobile wallets, and an emphasis on interoperability. Consumers appreciate the flexibility, and businesses benefit from broad market reach.

By End User

• Retail Establishments: Digital gift cards in North America’s retail sector offer consumers convenient, personalized gifting options. Trending towards e-commerce integration, retailers leverage digital gift cards to boost online sales. Enhanced features, like instant delivery and customization, cater to evolving consumer preferences, fostering growth in the retail segment.
• Corporate Institutions: In the corporate sector of North America’s digital gift card market, businesses use these cards for employee incentives and rewards. The trend includes integration with corporate wellness programs and increased personalization, aligning with the demand for versatile and meaningful corporate gifting solutions.

Competitive Landscape – North America Digital Gift Card Market

The North America Digital Gift Card Market is highly competitive, with a large number of manufacturers and retailers operating. Some of the key players in the market include:

• Amazon com Inc.
• Walmart Inc.
• Apple Inc.
• Google LLC
• eBay Inc.
• Starbucks Corporation
• Target Corporation
• Home Depot Inc.
• Best Buy Co. Inc.
• PayPal Holdings Inc.
• Visa Inc.
• Mastercard Incorporated
• American Express Company
• Sephora USA Inc.
• Netflix Inc.
• Others

These companies operate in the market through various strategies such as product innovation, mergers and acquisitions, and partnerships.

Several new players are entering the North America Digital Gift Card market, adopting innovation and development strategies to establish themselves. These newcomers often focus on technological advancements, user-friendly interfaces, and unique value propositions to attract consumers.

Key players dominating the market, such as Amazon, Apple, and Google, maintain dominance through their established brand recognition, extensive user bases, and continuous innovation. These market leaders leverage strategic partnerships, diverse offerings, and seamless integration with popular platforms, reinforcing their stronghold and influencing consumer preferences in the rapidly evolving digital gift card landscape.

The North America Digital Gift Card Market is segmented as follows:

By Channel

• Brick and Mortar
• Digital

By Application Area

• Consumer Goods
• Health and Wellness
• Restaurants and Bars
• Travel and Tourism
• Media and Entertainment
• Others

By Card Type

• Closed Loop
• Open Loop

By End User

• Retail Establishments
• Corporate Institutions

Regional Coverage:

North America

• U.S.
• Canada
• Mexico
• Rest of North America